Financial preparation for university

by Harrison, Year 13 Economist

As University offers start to arrive, my thoughts are turning to my preparation for life after AKS. As an Economics student, money and student bank accounts are at the front of my mind. 

You are allowed to open a student bank account as soon as you receive an offer letter from UCAS, either conditional or unconditional. The main difference between a student bank account and a standard current account is the student bank account comes with an interest free overdraft. Banks offer up to a £3000 overdraft facility, so you should shop around for the best account, offering the largest and longest overdraft, while you have the time. An overdraft facility means you can withdraw more money than you actually have in your account. This could be useful at the beginning of term should there be any delays in your student loan. You need to check the limit of your overdraft, to ensure you do not exceed this amount. Banks do not like unauthorised overdrafts; as long as you stay within your limit anything you’re borrowing will be interest free for the agreed time period. Check how long your overdraft facility is available for, as it might not be the full three years. 

Be careful not to treat your overdraft as a loan – it is meant to be used for difficult times when unforeseen circumstances have left you temporarily without funds. Don’t treat the overdraft as a loan and run up an additional £3000 debt, because when the overdraft ends – and it will definitely end when your course finishes – the bank will start to charge interest which could be as high as 15% to 20%.

I suggest that you always check with your bank directly, and remember not to accept any unsolicited phone calls as these may be fraudulent.